Though it sometimes doesn’t seem feasible, physician retirement is possible. And for physicians in certain specialties, retiring early isn’t just a dream — it’s a reality.
Some specialties, particularly those with a shortage of physicians, have a high rate of doctors well over retirement age. Yet, others tend to see physicians retiring earlier in their careers.
Whether you’re a medical school student deciding on a specialty or a practicing physician who has been planning for decades, there are some ways to retire earlier than you may think.
Today we’ll answer the question that so many physicians, residents, and medical students want to know:
Which physician specialties retire early?
What Factors Lead Physicians to Retire Early?
What factors contribute to physicians retiring early as opposed to those who work well into their late 60s or 70s?
There are several reasons why some people put their days in healthcare behind them when they’re only in their 50s.
Length of Residency
As a physician, your career starts in residency, and the length of that residency program is often the impetus for early or late retirement.
Residency programs range in length from three years to seven years, depending on your specialty. Physicians who spend a minimum of three years in residency have the opportunity to start their careers sooner. That affords them the chance to begin earning a physician’s salary sooner and saving for retirement earlier in their career.
The average primary care physician in the U.S. earns an average of $243,000 per year. Then some specialists, such as neurosurgeons and cardiovascular surgeons, earn an average of more than $600,000 per year.
Physicians who earn higher salaries have a greater opportunity to save more and plan for retirement further in advance. Increased salary also offers high-earning physicians the chance to work fewer years than those who earn less annually.
Another reason that some physicians choose to retire early is one that we can all relate to:
It’s not just long hours and demanding responsibilities that lead to physician burnout.
According to the AMA, physicians get caught between meeting their patients’ needs and adhering to their employer or hospital group’s requirements. This paradigm of balancing clinical activity with high-quality patient care causes many physicians, regardless of specialty, to feel burned out early on in their careers.
Why Do Some Physicians Retire Later in Life?
Some healthcare professionals, such as family physicians in primary care, are in high demand. There is a shortage of physicians in various medical fields, and people who work in those fields tend to retire later.
Other physicians stall retirement for the fact that they simply cannot imagine not being a physician.
But one of the most significant contributing factors to a late retirement is a lack of savings. Some physicians haven’t planned well enough, invested enough, or saved enough to retire when they’re in their early sixties.
Fortunately, there are remedies for that and ways to ramp up your retirement savings plans throughout your career. We’ll talk more about that below.
Which Specialties Have the Oldest Physicians?
The traditional retirement age is 65. However, every individual can choose their retirement age based on their own needs and financial stability level.
Some specialties that tend to have the oldest physicians are:
Where there is a shortage of physicians in a specialty, it’s common to see older physicians working in those areas. As the physician supply shrinks and the physician workforce’s demand increases, many feel a moral obligation to continue to practice.
But some older physicians choose to work later in life for other reasons altogether.
In some cases, job satisfaction and a dedication to patient care cause some physicians to want to practice longer. The close relationships they’ve built with patients encourage them to want to keep working later in life to serve those patients.
Physicians that are self-employed in their own practices often tend to work longer, in some cases. This is because they may have invested more money into the practice which could have impacted how much they’ve actually invested and saved in their personal finances. Keep in mind that this doesn’t have to be the case for you. With proper planning, many physician entrepreneurs have been able to earn more, save more and retire earlier than their counterparts.
In some cases, self-employed physicians don’t contribute to an employer-sponsored retirement plan with an employer contribution match. This can reduce the amount of savings a physician has when it’s “time” for retirement. On the flip side, those who are able to produce more income can save more into their 401(k) plan with profit sharing and get almost three times more saved on a tax deductible basis into their plan.
However, for physicians that want to retire early, owning a private practice can also work in your favor. Working for yourself presents the opportunity to make more money than you might make working as an employee in a healthcare system. The more money you earn, the easier it is to plan for and save for retirement.
Learn more: How to Start a Medical Practice.
Specialists That Retire Early
There are some specialties where physicians tend to retire early.
They are quite varied. All have different reasons why these specialists retire before the traditional retirement age.
Retirement patterns vary among demographics and healthcare providers. But one type of specialist that we often see retiring earlier than others is the interventional radiologist.
Unlike other radiology professionals, interventional radiologists rely on imaging technology to guide them by inserting needles and catheters into blood vessels and various organs. This includes a wide range of procedures, such as angioplasty, performing liver biopsies, and inserting stents.
Full-time interventional radiologists that work for large health systems are frequently woken up in the middle of the night to perform critical, life-saving procedures. It’s one of the most demanding, high-pressure medical specialties one can practice, but it also commands a hefty salary.
According to Salary.com, the average median income for an interventional radiologist is $421,500 per year.
This large salary makes it easier to:
- Save money early in your career
- Make wise investments
- Create a sound retirement plan
All the above tactics can contribute to early retirement.
E.R. physicians have one of the most stressful jobs on earth, and burnout often starts them thinking about retirement sooner than later. Between on-call hours and the day-to-day responsibilities of the position, most E.R. physicians are ready to retire well before the traditional retirement age.
But having to spend only three years in residency may also become a contributing factor. Physicians that specialize in emergency medicine tend to start working sooner than those in other specialties that require more years in residency. With proper planning, they can get a jumpstart on their retirement savings.
Emergency physicians are in high demand, which leads to many open opportunities to shift your work schedule. Rather than retiring completely, you’ll find that some E.R. physicians opt for part-time retirement. Or, they work locum tenens as a way to cut back on hours yet still bring in part of their full-time salary.
Anesthesiology is a unique field.
Partly because most anesthesiologists don’t develop personal relationships with patients. Patients often seek out particular specialists, such as cardiologists and O.B./GYNs. Yet it’s rare for patients to have a preference for one anesthesiologist over another.
Anesthesiologists also have a high earning potential, with an average salary of $305,246 per year. Like other high-income earners, the bigger the salary, the easier it is to make smart investments and plan for the future.
In comparison to physicians in other specialties, anesthesiologists also tend to have an excellent work-life balance. This often allows them to pursue other interests (profitable interests) that can make it easier to save for retirement.
How to Plan for Retirement
If you’re hoping for early retirement, you’ll need to start planning for it early in your career.
A robust retirement plan should consist of:
- Various diverse investments
- A retirement savings account
- Stocks and bonds
- Real estate
Make the Maximum Contributions to Your 401k
If you’re eligible to contribute to an employer-sponsored retirement plan, such as a 401k, do so.
If your employer offers contribution matches, max out how much you put into your plan each year so that you can maximize your employer’s contribution as well.
Put Your Money in an IRA
If you’re self-employed, work locum tenens, or aren’t yet eligible to contribute to an employer’s retirement plan, save your money in a SEP IRA (for self employed or 1099 income earners) and use a Backdoor Roth IRA if you are employed.
SEP IRA contributions are tax-deductible and grow tax-deferred, so making the maximum annual contributions is also a way to reduce your tax burden in the current year. Backdoor Roth IRA contributions are not tax deductible but they grow tax free.
The less you have to pay each year in taxes, the more money you’ll have to invest in other areas. Plus, the more your retirement savings can grow and distribute tax free, the more efficient your income will be in retirement.
Stocks and Bonds
A diversified retirement plan should include investments in stocks and bonds.
The average stock market return is 10% annually. While there are risks involved, most people who remain in the market for the long term see substantial gains.
Buy Real Estate
Real estate is one of the best investments you can make.
In 2000, the average U.S. home price was $126,000. As of 2020, it is $259,000.
Like stocks, real estate investments almost always pay gains over the long term. That makes it one of the best avenues to save and grow income that you can spend in retirement.
Plan for Retirement by Protecting Your Income With Disability Insurance
Planning for retirement requires that you have an income.
What will you do if you become sick or disabled and can no longer work and earn a salary?
No matter what specialty you work in, having disability insurance is a must for physicians and other high-income earners. Disability insurance is income protection — not for the income you’ve already made but for the future income you haven’t yet earned.
If you become disabled or suffer a disease that prevents you from working, disability insurance will pay you a portion (usually about 60%) of your current salary. It is the single best way to ensure that you’ll have a steady stream of income so that you won’t have to tap into your retirement savings before it’s time.
As a physician, it’s never too early to get disability insurance. Last year medical students (M4s) and residents can benefit greatly by getting a policy when they’re young to protect them throughout their careers.
Retiring Early Isn’t About What You Do; It’s About How You Plan
Retired physicians will tell you that the only way to enjoy a pleasant retirement is to have adequately planned for it.
Creating a plan early in your career is the best way to set yourself up for a healthy financial future when it’s time to take off your white coat.
We can’t stress enough how crucial it is for young physicians to start planning for retirement as soon as they land their first job. Saving for retirement should be as high a priority as paying down medical school debt.
No matter how old you are or what field of medicine you work in, the time to start planning for retirement is now.
It doesn’t matter if you work in pediatrics, psychiatry, cardiology, internal medicine, family medicine, or some other medical specialty. With proper planning, physicians can retire comfortably — and do so before they are eligible for Medicare themselves.
Invest in a 401k or employer-sponsored retirement savings account. Put your money into IRAs, invest in stocks and bonds, and buy real estate in order to have a diversified investment portfolio.
And, most importantly, protect yourself with disability insurance. Without disability insurance, even the best retirement plan can go awry if there’s no more income to fund it.
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